TV Racing's Mantra: 'Show Me the Money!'

A $2.4 billion TV contract to broadcast stock-car racing and remake the Speedvision cable channel around it gives everybody in the business-except NASCAR-the jitters.

May 2002 By STEVE MAYER

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Cracks in the stock-car image of "We're jes' folks!" began to appear. At last year's Cracker Barrel 500 at Atlanta, the sponsoring restaurant chain was mentioned just once an hour. Cracker Barrel was paying a hefty $1.4 million a year to the track owner, Speedway Motorsports, and was furious when a Fox voice described the race as "Winston Cup racing live from Atlanta presented by UPS." In two previous years on ABC, Cracker Barrel heard its name over the air 60 times. Cracker Barrel rejected the idea of paying extra for Fox's "on air" naming rights, believing its contract provided for that. So Cracker Barrel sued NASCAR, Fox, and the track.

And yet when another Speedway Motorsports track, Charlotte Motor Speedway, sold its track's name to Lowe's Home Improvement Warehouse in 1999 for 10 years for $35 million, the track's owners lined up squarely behind the sponsor when NBC wouldn't play ball. In rambled an irate Humpy Wheeler, general manager of the track, who hooked up some tow trucks to the NBC production trucks. "Say the name as 'Lowe's Motor Speedway,' or we'll yank you outta here" was the message, and since the track has its own police department, it would be wise to assent. NBC did, but only after Lowe's reallocated some ad dollars earmaked for NBC.

Pay-for-View Phobia

Across the pond among the glamorous garages of the Grand Prix circuit, where a top Formula 1 team costs somebody as much as $150 million to $200 million a year for 17 races (a top Winston Cup budget runs $15 million for 36 races), maestro Bernie Ecclestone has been roiling the waters of tradition.

The 71-year-old impresario of Formula 1 racing, who is one of Britain's luridly wealthy (a net worth of $5 billion), has sunk $75 million to create the most advanced digital mobile-television-production "city" on wheels. Ecclestone's idea was simple: "Upsell" the die-hard F1 fan to digitally enhanced pay-per-view television, and double the annual $200 million to $300 million that F1 earns from traditional broadcasts of "free" TV.

For, say, $15 per race, Ecclestone's technical setup could show the in-car camera of every racer on the track and include new camera angles, audio and data driver-to-pit transmissions, and other whiz-bang, high-tech gadgetry. In most pay-for-view ventures, a one-to-two-percent "buy rate" produces good profits, so the TV revenues from traditional TV are not affected.

But with progress comes fear, and the automakers-BMW, Ferrari, Ford, Honda, Mercedes, Renault, Toyota-are terrified that their huge investments in F1 could go to the dogs once the control of F1 goes into new hands. Since 1999, Ecclestone has sold 75 percent of his F1 holdings for $3 billion. The automakers have alternatively threatened to establish their own racing series or tried to purchase the company that owns the rights out of fear that Ecclestone's inevitable successor-or the succeeding entity-would force all of Formula 1 into pay-per-view.

Where We Go from Here

So, how does the new Speed Channel differ from the old Speedvision?

NASCAR TV, per the Fox contract, dominates during the week, but there's also Formula 1, CART, World Rally, sports-car, and motorcycle racing on the weekends.

But the Speed Channel has another big problem. More than 65,000 Speedvision viewers begged Fox, through an on-line petition, not to forget the more traditional road-racing gearheads who brought them to the dance. Their message? Don't substitute "NASCRAP" for the important things in life, namely, British Touring Car, Le Mans, and the Barrett/Jackson auction.

To his credit, Speed Channel president Liberatore heard the "call of the gearheads" and has pledged to position as much racing as possible live, not delayed.

"When we looked at the schedule Speedvision had, we determined what was the solid programming," he said, "and we went back to everybody and said, 'If we can't get it live, we don't know if we're interested in it anymore.'"